(Bloomberg) -- Paul Wick of Seligman Investments has been trimming his holdings of Nvidia Corp. in recent weeks after questioning earnings growth prospects at the stock market darling.

“Our enthusiasm has moderated somewhat over the last one to two weeks,” Wick said by video call at a UBS Group AG event in Singapore on Friday, without elaborating on how much of the stake has been cut. 

Wick — who has invested in the tech sector for about three decades — drew parallels between Nvidia and Cisco Systems Inc.’s boom during the dot-com bubble. Lofty valuations and the lack of recurring revenue “makes their businesses inherently riskier,” he said. 

Nvidia gets about 60% to 70% of revenue from its 10 largest customers, which makes it “inherently a much riskier company than Microsoft or Google who have very low customer concentration and thousands upon thousands of customers,” said Wick, who runs the $13.5 billion Columbia Seligman Technology & Information Fund. 

The chipmaker briefly became the world’s most valuable company recently after shares more than tripled over the past year on artificial intelligence optimism. Yet many investors are betting the rally will continue, with Wick and Research Affiliates LLC’s Rob Arnott among the few detractors. 

Nvidia trades at 43 times projected earnings over the next year, a richer valuation than all but one of its peers in the Philadelphia Semiconductor Index.

Generative AI companies that have spent billions on Nvidia systems have low return on invested capital, Wick said. He added that “many of Nvidia’s largest customers are aggressively designing their own processors,” including Alphabet Inc.’s Google, Microsoft Corp. and Meta Platforms Inc. 

The stock remains among the top holdings of his fund, which has beaten 97% of its peers over the past three years, according to data compiled by Bloomberg.

Nvidia has to “show that the growth can continue at a robust clip,” Wick said.

--With assistance from David Ramli.

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